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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Us 13, Ibm 8, Google 5, Muenster 4, Kayla 4, Motorola 4, John 3, China 3, John Ford 3, Facebook 3, Donnelly 2, Dell 2, Sec 2, Motorola Mobility 2, Washington 2, Cnbc 2, Maria Bartiromo 2, Johnson & Johnson 2, Geico 2, Zach 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    October 18, 2012
    3:00 - 4:00pm EDT  

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bill. any indication in terms of when this stock opens again? >> it doesn't sound like they're going to want to open it until after -- until tomorrow. because they say they're working on finalizing the earnings statement itself and get the document ready for the 4:30 p.m. eastern time conference call that was scheduled for that time. so my bet would be we're not going to see it trade again today. >> stock was down as many as 10.5% earlier. it is off of the lows in this halt. again, we are looking at people really scrutinizing the quarter and wondering if, in fact, we would have seen this kind of selloff anyway, even though the numbers were released prematurely because the numbers missed expectations. >> this is why the companies often decide to release earnings when the market's not trading. >> right, after the bell or before the bell. sure. >> you get time to go over the report, understand it. >> they were supposed to do that as well, by the way. >> exactly. a lot of things were pending. >> 4:30 p.m. conference call. we're going to take that conference call live so we can
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hear the statements from the executives as far as what happened. although, google did, in fact, release a statement earlier blaming it on donnelly. >> and donnelly told us they are in full investigation mode to figure out how it happened. crazy day. >> meanwhile, look at this market. we've got numbers right now. kayla is on it. what can you tell us on google? >> well, maria, we're seeing consolidated revenues of $14.1 billion for the quarter. they're calling it an increase of 45% compared to the same quarter a year ago. gap net income for the third quarter was $2.18 billion compared to $2.73 billion in the third quarter of last year. i think the most interesting part of this release -- of course, we've seen most of these numbers before several hours earlier, but the second paragraph in this release is now included with larry page, the ceo saying, when he a strong quarter, revenue was up 45% year on year and at just 14 years old we cleared our first $14 billion
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revenue quarter. page also saying he's really excited about the progress we're making creating a beautifully simple, intuitive google experience across all devices. that's the quote we've been waiting for all afternoon. we're going to be digging through this release. we're going to be comparing it to what we saw earlier. we'll have more later. >> all right, kayla. thanks very much. the stock is still halted even though the numbers are, in fact, out. >> my bet would still be they're not going to trade it until tomorrow. so let's continue to break it all down in the "closing bell" exchange. gene muenster is with us. dan greenhouse, a cnbc contributor from btig as well. gene muenster, what do you make of this fiasco today? >> well, i mean, the fiasco side, it's not google's fault. i can't remember actually seeing anything quite like this. i think what we're really focused on is just the core business about what's going on. you can look at google.com and youtube, their core parts, that
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was up 2.5% sequentially. we were expecting that number to be up 7%. on a year over year basis, their core business was up 14% versus 21% in the june quarter. from our perspective, there's definitely some deceleration in the core that we want to hear more about tonight. >> and in terms of this slowdown and missing the estimates, gene, is this a stock that you would buy here? >> not quite yet, maria, although i do think it's overdone at this point. i think, just to be clear, did google actually come out with a statement now from kayla? is that what we just heard? >> we did, yeah. actually, the second paragraph of this release calling it a strong quarter, the first over $14 billion revenue quarter. page saying he's really excited about the progress the company is making. >> let me just point out, gang, we're just now getting word that they are going to room trading on google at 3:20 eastern time. so in about 15 minutes we will have trading resumed on that stock.
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go ahead, gene. >> yeah, thanks, bill. bill and maria, i think at the very near term, meaning the next hour or two, it's going to trade on technicals. let's face it. when there's uncertainty in the market, you're going to have that aftermath play out. that said, i think when you look at it technically, the stocks had a big, great run up here. i think that a further retreat down the 200-day moving average would not be unusual. that would take google down to about the 640 to 650 area. there i think it would look intriguing as a buying opportunity. >> dan, what do you see? >> well, the stock has had a terrific run. so has the technology sector more generally. i'm not going to comment on the specifics of the quarter. i'll leave that to gene. i will echo bill's comments. this is why you release earnings, especially for volatile companies, after the close. you want to give investors time to digest the report and trade accurately. when this thing opens, it's going to be a lot of fun to watch. i don't know that quote, unquote price discovery will be the order of the day.
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>> kayla, i thought harvey pitt made an interesting comment. it's all about finger pointing right now. we'll focus more on the earnings, which we should be doing anyway. harvey's point was we're all looking it to blame art donnelly for this. why did google give them an incomplete report to begin with? he's blaming google in this regard right now, suspe isn't h? >> well, arguably, google did not need to provide the quote to make its numbers accurate and to get the signoff from regulators. you're going to be preparing that quote and preparing your executive commentary for that one moment when you get to sign off from regulators and are able to push it out. we don't know what the timeline was with what actually happened. i think the reason why investors have been quick to trade up again is they realize stuff like this happens all the time. it's ultimately ati relatively human error. they process millions of pages
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of documents a day. this is an unfortunate blip, but it's a blip on their radar. >> it's very possible, if not outright likely, that somebody just made a fat finger mistake, as we say. there's no sort of malicious wrongdoing here. somebody just made a mistake. in terms of lawsuits or regulatory action, we should just keep in mind that sometimes people make mistakes. >> some are more high profile thanothe , though. in this case. >> and i think they want to be extra careful that there isn't any blip that turns worse like what happened with facebook. so, you know, that's still in distant memory there. >> gene muenster, let's get back to the earnings. it's under the category of what did you think of the play, mrs. lincoln? what do you think of the earnings? we have this positive spin from larry page in all of this. do you see it that way at this point? >> no, i don't. i think that this is a disappointment. we were talking earlier about the core. one of the things investors want
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to understand is how mobile monotieization works. the street was expecting it to be down 11%. doesn't sound like a huge difference. what it is, that number needs to be improving to get investors to feel more comfortable about their mobile business. so i would never bet against google over a one to ten-year time frame, but i think just in terms of this stock near-term, the next quarter, i think those two issues, the core and what's happening on mobile, are going to cause investors to revisit their near-term thinking on google. >> if i can very quickly add with respect to facebook since we brought it up, that's been one of the problems for facebook. i don't think this particular issue today is at all akin to what's beginning on with facebook, but with respect to mobile monotiization.
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>> all right, folks. thank you. just to reiterate again, they will resume trading of google at 3:20 eastern time. so in about ten minutes. a little over ten minutes we'll find out what the market is going to do with this stock. in the meantime, there is other action going on beyond google today on wall street. bob is following all of that for us right now. >> good to try to get that reopen. it will give the stock a chance to balance. remember, a number of analysts have called it buying opportunity. we'll see if that happens. meantime, not a lot of effect on the markets overall. s&p 500 was sitting near the lows for the day just a short while ago. we got near 1465. that would have been a new high if we would have closed there. started drifting lower before the google numbers came out. weakness in tech, obviously, today. the triple qs, nasdaq 100 really seeing the most weakness of any of the major sectors. there's your power shares. sectors today, if you look, the tech sector is where the real weakness is. elsewhere, consumer staples,
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health care, materials, fractionally lower, but not any tremendous moves. what really brought the market to the lows of the day, the euro just kind of fell out of bed about 25 or 30 minutes ago. there's an intraday chart of euro. euro down, dollar up. that usually moves our markets. back to you. >> all right, bob. thank you very much. well, what a day we're having here. about 50 minutes left in the trading session here. the dow off the lows. we're down 19 points right now. >> stick around. there's a lot more to come on this busy thursday edition of the "closing bell." more on the story of the day. if you google the word "oops" right now, google comes up. the mistake, the fallout. it's still developing, and we have the story. and our search for spicy software stocks. chipotle and microsoft earnings out after the bell. instant information and in-depth analysis that could drive the stock market tomorrow. that and more next on the "closing bell."
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it will reopen at 3:20. meanwhile, john ford is reporting google may have been calling analysts ahead of the earnings release saying cryptic things like some numbers are going to mean more than other numbers. john, what can you tell us? this is causing a bit of a stir. >> yeah, maria, i want to be very clear about this. this isn't very uncommon in my experience with tech companies i cover ahead of earnings. sometimes they'll talk to me, talk to analysts and say, our report is coming up, let me remind you of a few things going on ibm might say, remember we spun off our retail store solutions during the business. that will have some impact. by the way, here's some currency impact we have, things like that. trying to set our minds, perhaps, in certain directions ahead of the numbers coming out. what i heard is that google was doing some of that, not saying, hey, this quarter is going to be bad, butti saying insaying, byu might want to pay attention to this number instead of this
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number. >> do you know specifically what they were guiding toward, john? what numbers were more important than others, i wonder. >> well, you know, i want to be careful about getting back in touch with some of those analysts i talked to. my sense was that google knew that traffic acquisition costs were going to be -- something they wanted to clarify or put their own spin on ahead of the quarter. so that was one of the issues that they were talking about. >> all right. i guess we want to bring in jeff cox. we have zach carabell with us as weapon. jeff cox, they try to grow the companies to monetize their service. we find that's, you know, increasingingly difficult these days. you think of a facebook. you think of a zynga and others out there. >> absolutely. i think gene muenster in your last segment made a very important comment about this cost per click situation.
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very big disappointment. it goes to the monetizing question. from what i'm hearing out there, just a lot of talk about too much supply, not enough demand, so therefore driving down the amount of money that google is getting from their rates. it's all part of a much bigger picture, though. we just talk about companies and their top lines, all the top line misses we're seeing so far in the third quarter. i think leaving a lot of investors really concerned. i saw a note earlier this morning that said, when you get on this type of trend where we're seeing only a 42% top line beat so far in earnings, often takes three quarters for the gdp to really recover from something like that. >> right. so knowing what we know, that search is appearing to slow, mobile's taking a bit more time, zach, what do you want to do with this stock? >> first of all, look, it's a great story. it's a fun media day. leaked release, don't know what's going on. big company slowing down. cats and dogs living together. you know, i don't think given that we know the global economic
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situation, entered a very perilous and difficult situation over the summer, and given that google is about as close as you get for a large tech cap company because so much commerce flows through search, to then read the signal and the noise as an indication of google itself running into massive issues about the monetization of a company that even in a worse year this year will still grow 20% over the $29 billion of revenue last year. i think this is just way too soon to make the kind of conclusions people are making. >> just point out, we're three minutes away from them reopening if they go according to schedule. what you seem to be saying, zach, is you're not worried because you're looking at other areas where they can grow this company. i don't want to overemphasize that word, but maybe they're de-emphasizing search as part of their business. >> two thing. one, the global economic weakness impacts google in an intimate fashion. unless this is so google specific -- and we saw it from
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ibm, so clearly it's not. two, i'm worried about any company i invest in all the time and its future viability. >> google is sort of like the china of wall street, though, don't you think? china's gdp was 7.4%. we would give our right arms and left leg for that. it's china, so it's like we're not happy with that. i think it's the same story with google. you expect more from them. >> that's a good analysis. >> great metaphor. i think the point there is they're both accelerating at a rapid rate. the whole monetization thing, google is continuing to monetize its base. the fact that younger people who are more mobile oriented may not be doing as much commerce as their somewhat more demographically older and more wealthy peers are doing online can be as much of a generational transition about commerce going to mobile. again, not a google issue. >> right. john ford, they did pay $12.5 billion for motorola mobility. they're trying to make that work as well. we're about 90 seconds away from the reopening here.
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>> they are. that's going to be one of the things that gets a lot of focus because of the more than $.5 billion loss there. there are a number of issues on the cost side. investors wondering on how much of an impact we'll see like on cost per click. >> on the motorola, it's not really a loss. it's a write down on the cost of that. that could prove to be -- because they're acquiring a platform linked to android. they really are thinking about the next ten years of bringing together search on a mobile platform that they now currently own and control and write the software for one of the most ubiquitous mobile platforms in the world. >> we are waiting for google to reopen. >> that it true. that is true. >> zach, you're going to kill me for this, but you're the trader. you're the guy that has to make these split -second decisions. how is this going to reopen?
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>> look, i'd take a 10% down on google as a real opportunity to look at this. if you believe this company is well run and has a dominant franchise for the next one to ten years, you know, 10% down days don't happen very often for quality companies. i'm not saying i'm going to jump into this head first, but, you know, i'm not -- i'm really interested in this if it goes down the way it looks like it will. >> there it is. >> this stock has resumed trading. down $73, almost 10%. >> doesn't look like it wants to come back. >> i think this really sets the table for what we're about to see ahead. we have microsoft earnings coming up in a little bit. i think it's going to tell us a lot just about which direction the tech area is heading in. when you look at the analyst revisions, analysts were actually upbeat about tech, looking for some good numbers. if these numbers don't come in as well as they could be, you could really run into some issues. >> let me just add some color
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here, guys. i know it doesn't trade here at the new york stock exchange, but there was an automobile buzz on the trading floor just now when the stock did begin to trade again. as we see, it is coming off that low, but not convincingly yet, zach. >> yeah, well, look, it's been 57 seconds. i mean, i know we live in a world of high-speed trading. >> it is television, buddy. >> i'm not that high speed yet. i think it's an interesting question of everyone knew this quarter would be weak. then, of course, when it's proven to be weak, people act like, oh, my god, i had no idea it would be this weak. again, on jeff's point, i'm not as ready to throw in the towel about the viability of big cap tech just because we had a global economic environment that was manifestly slowing down. do you believe company x, y, and z are capable of moving forward? if i'm going to choose between google, hewlett-packard, and dell, it's an easy choice. google has a lot of potential to create a base. something like hewlett-packard
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doesn't. >> who is benefitting from this miss? the miss is obviously on the core business, the search side of the business. so which competitor is getting that market share? gene? >> jeff? >> who would you say is taking the market share away from google as the core search business is really where the miss is? >> is that to me? >> yes. >> oh, i'd say it's kind of up in the air now. when you look at some of the upstarts, you know, i think it's going to be interesting to see which direction bing is heading in. we might the get more -- again, a little better vision of that when earnings come out. i think with google, it's just a matter of figuring out how they're able to keep driving revenue on this to just increase the amount of traffic for their ads. >> by the way, if you're just joining us, here's wha happening. if you're wondering what's going on here, google was scheduled to
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release its earnings after the bell today around 4:15 eastern time. inadvertently, r.r. donnelly, which was publishing the earnings report to give to the sec, put it online prematurely around noon eastern. that was inadvertent. then when we looked at the numbers, they were not as expected. they missed on the revenues side. they missed on the earnings side. the bottom line. the stock was down 10% just like that. they halted trading for a couple of hours, just opened moments ago. we are still down about 8.7% right now. john ford, if you're larry page, what are you going to say on that conference call at 4:30 eastern time? >> boy, i'll bet you he wishes he had waited a few more days to get his voice back. i don't know. i think you just wantoe up front with investors about exactly what happened here and issues like co perclick, what's happening in mobile. i want to go to maria's question a moment ago about who's taking
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shares from google. i think the answer is nobody. google is gaining share in search. this is about how much money google makes off of eachlick and perhaps the overall growth trajectory of search. yahoo! is having trouble monetizing search in its deal with microsoft. google is gaining share overall. it's not a matter of search share here for ogle. >> great point, john. thanks for that. >> this is an industry-wide question right now, absolutely. >> i think the only company you can say maybe doing well at google's expense in terms of monetizing online commerce would be something like amazon, which is just, you know, eating up more and more of the commerce dollars online. but they have much higher embedded costs than google does. >> exactly. >> they're on fire, amazon. thanks, guys. appreciate it. we'll see you a little later. we are in the final stretch here of trading. google resuming trading, down off the lows, as you can see there. down about 7.75%. the rest of the market really mixed today. down about 17 points on the dow
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industrials. when we come back, more on the google fallout and how the stock is trading. we're going to bring you their earnings conference call, which is scheduled to begin at 4:30 p.m. eastern time. you will definitely not want to miss that. stay tuned. mike rowe here at a ford tell me fiona, who's having a big tire event?
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into a high-tech masterpiece? ♪ dell has the technology and services to help you solve it. welcome nt to show you google. it resumed g. it off the lows, down about 8.33%. the company is about an hour away from the earnings
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conferce call. 'll brg to yolivet 4:30 p.m. eastern time. you have to believe this mishap, reing these earnings rly, dominates at least part of that call at the beginning of the call. >> you would think so. >> then we'll move on to the earnings, which of course did miss analysts' expectations. shows things are slowing down. let's bring kayla back on this re lyou'king at the earnings, the revenue numbers released later. what can you tell us in terms of what the business looks like right now? >> well, as far as what we saw earlier in the day, we can tell you all the numbers are the same, missing on the top line by $1.60 per share -- missing on the bottom line, rather. as far as the business, it's clear they have increasing currency costs. their head count has come down by about 1,000 people compared to where it was last year. costs per clicks and what they're getting paid per click, that's also decreasing. it's clear their revenue growth is slowing, though it remains
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steady compared to the rest of the sector. if you look a at what the analyst community is saying, earlier in the day at first blush, what was coming out in the commentary in regards to the early report, everyone was pointing to the core business. you were just talking about it too. even though it is clear that their core search business and the website is slowing a little bit, i want to share with you some of what the other analysts are saying. when you look at oppenheimer, they're pointing to currency weakness as well. motorola is a name popping up. sun trust pointed to cost per clicks. jpmorgan pointing to the currencies yet again because of the shifting in overall currency environment in the last quarter. they took about a $500 million hit on that front. that's what we're seeing so far from the analyst community. a lot of mixed reaction. you can see by the potpurri that it's speckled. >> and do you think that the
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slowdown was expected, kayla? in terms of what the market was looking for, what would you say was priced into the stock already? >> well, maria, i think the slowdown was expected, perhaps not to this extent. of course, google doesn't give guidance. you can't really base your expectations off of what the company has given you to go off of. you have to think about where you think the fundamentals of the sector are and how much you put stock in what the company has said before based on their product mix and overall operating expense environment. >> they talk about the slowdown and cost per clicks going down four quarters a row. is google becoming a mature enough company, i wonder, now that it's going to be economically sensitive. there's a time in their growth period where it doesn't matter what the world economy is doing, they're going to grow anyway. i think we're starting to sense they're becoming a sicklical cy
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oriented company. >> right. cost per clicks is a much different pricing model. as a lot of your users are shifting to use google on their mobile devices, you're not going to have the same earnings structure as you did in the past as that user base shifts. >> all right. kayla, thanks so much. see you later. >> 30 minutes to go. yes, google is down. markets overall down. the major averages at this hour lower. the dow down 15 points right now. >> so is the google selloff presenting investors with a buying opportunity? top strategists will weigh in next. >> also, will this rattle investors' confidence even more? donald trump weighs in later. stay tuned. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan.
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all right. google shares still down sharply this hour after the disappointing earnings report released prematurely. seema mody is tracking the stock right now for us. >> 3 million shares have exchanged hands since google has resumed trading. we're seeing very heavy volume in the stock. this after being halted for more than 2 1/2 hours after a premature earnings report was
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mistakenly released. in terms of its numbers, analysts focused on its cost per click rate, which fell 15% year over year. piper jav ri says this number will likely renew investor concern around mobile monetization. we're one hour away from google's conference call at 4:30 p.m. eastern time. cnbc will take that live. as you can imagine, analysts getting their questions ready for what will be a very interesting call. >> absolutely. thanks so much. so what can we expect from that conference call in about an hour? it's scheduled to start at 4:30 p.m. eastern. julia boorstin with a preview. >> despite that intrigue and uproar over the earnings release, the big question analysts will be asking is about why those earnings were weaker than expected and what the forces are behind that and how long it will take to turn that around. just like with facebook, the growth of mobile devices and tablets seems to be threatening google's growth. google's cost per click was down 15% this quarter from a year ago
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and down 3% from the prior quarter. that is a larger decline that what wall street expected. this comes down the fact that ads on mobile devices cost less than ads on desk tops. this is a challenge for google as people shift more of their time to their smart phones. another big topic that's sure to be addressed on the call is what google calls its sites revenue. that includes sites tied to keyword searches. that grew 15%. that's less than half of the growth from a year ago. of course, analysts have been weighing in on this as seema mentioned. barkley's called this a buying opportunity. gene muenster also honed in on the mobile monetization issue saying it is just a function of time before google can address the mobile monetization issue, which will of course eventually renew confidence. right now, that is the source of his concern. and jpmorgan said that these numbers aren't actually as bad as they initially appeared, saying a substantial portion of the revenue shortfall was due to greater than expect the currency
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exchange and hedging impact. maria and bill, we also expect to hear quite a bit about the $12.5 billion purchase of motorola mobility. we will be monitoring the call, which now starts in less than one hour. back to you. >> all right, julia. thank you so much. >> there's that word mobile again. facebook. it's the bain of their existence. everybody in that industry it trying to get their arms around mobile as it gets away from this rapidly. >> biggest change we've seen in technology in a decade. 20 minutes before the closing bell sounds on the street. we have the dow industrials down about 24 points. we're watching google, which is also lower as, as you know. so what's this big earnings miss and premature earnings relice going to do to investor confidence? we'll look at a lot of retail investors who own this stock and see what they feel about this. plus, is google's selloff creating a buying opportunity? more on this breaking story coming up. bob...
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[ male announcer ] good choice business pro. good choice. go national. go like a pro. google shares being hammered right now, off the lows after that inadvertent premature earnings release a couple hours ago. bertha coombs here with details. >> bill, not surprisingly google shares today trading just about five times the daily volumes and 3 billion shares trading since it has come in and will likely
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be heavily trade going into the close. incidentally, the low of the day pre that halt was 676. if you were brave enough to step in there, it's certainly a good return. meanwhile, a lot of collateral damage. a lot of the other sites like facebook, which will be reporting its earnings next week, getting hit hard today. what does this mean in terms of their advertising? raising questions again about how they're doing. some of the others have come back from the lows like yahoo!. microsoft is on top this afternoon. we're expecting 56 cents on the bottom line on $16.48 billion. take a look at ebay. ebay did not drop today during all of that confusion that dragged down the nasdaq on the google misfire of that 8k report. ebay closing at a near eight-year high if it holds up at these levels. back to you. >> bidding it up. thank you very much, bertha. well, google may be the most googled word on wall street today. we're going to take a closer look at how the stock has
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affected the broader market. >> joining us now to talk about that is mike tchael far. you own the stock. your firm does. your portfolio as well as yourself. what do you think? as a shareholder owning google, what's your take on when went on today? >> the premature slip, that always concerns me any time i hear it. overall, as i take a quick look, i am not really panicked. we had reasonable earnings growth. the motorola division seemed to be the cause of the loss. paid clicks were up 33%. that's off a strong up 28% year over year comp. so, i mean, it's not a disaster here. it's not a particularly expensive stock. i still expect mid-teens ea earnings growth, i think, over the next few years. >> but costs per click were down
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for the fourth quarter in a row. we're finding the currency translation is a problem. this is a multinational corporation now. they're finding trouble overseas right now, i guess. >> well, i guess so. the currency translation is always going to be a risk. clearly with potentially the dollar getting weaker over time, that should work out in google's favor. i think the more interesting question for this miss is, will this be a mark for other companies missing. with the market going up and the fundamentals globally not really improving, it could well be other companies disappoint as well. >> you think this is an industry economic broad issue as opposed to an issue specific to google. >> the question is, have expectations gone to far? we could very well be in for a bit of a rough earnings season. >> it's tough when companies like google don't provide guidance. analysts are left to their own devices in many cases. this is what happens, right? >> yeah, you can drive a truck through some of the -- if you look at the breadth of the
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analyst guidance, it's pretty wide. about this glitch, i asked some people around. i said, look, if this would happen perfectly after the close, they would have released the same numbers. would google have dropped? everybody said yeah. the bottom line is nobody's happy about a glitch, but it's the content people are really worried about. something i'm worried more about is ibm. down 8% in two days. that's almost unprecedented for ibm. the markets haven't responded much to that. financials had beat the earnings so far. i'm a little concerned with the trend in technology. >> great point, bob. in terms of technology, seeing a lot of misses here. intel, ibm, now we've got google. we're waiting on microsoft. what's going on in tech? >> i think we're seeing, you know, economic slowdown. we're seeing 2% gdp growth. we funded it every way we know how to fund it. we have got every central banker out there in the world collecting overtime pay, and you just can't make it leech into every area you need it to as
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strongly and as consistently as you would hope. so some weakness, not disasters, but i think clearly a slowdown. clearly, there's some lacking of business spending in here too when we look at those four components for gdp. there's still that hold back, i think, waiting for greater certainty from washington and a notion of the fiscal cliff and the election. that's coming out in numbers now. >> we should point out that microsoft windows 8 is coming out. a lot of people were predicting we would see a stall going into windows 8 because, of course, you're not going to upgrade your own technology if you're waiting on the new operating system. >> absolutely true. i asked my personal i.t. at visor. should i go for windows 8? absolutely not. stick with windows 7. they're going to have a lot of bugs. stick with what you have. >> so that's probably what's happening. >> absolutely. >> there's a bit of a stall in business. >> what do you like right now? what sectors, based on the global economy right now where we're seeing slowdowns everywhere, what do you like?
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>> well, with these low interest rates, we have negative real returns. so we have got to look for yield. despite the fact that dividend stocks have done well, i continue to favor dividend stocks, particularly those with multinational income. broadly diversified that can escape any particular domestic situation. as long as they have a broad global business diversification. the other thing i'd go for it currency diversification. i do think one of the things that quantitative easing in the u.s. and europe is going to do is ease currencies. >> so the multinational dividend stock, i agree. johnson & johnson, i know it's boring and the stock hasn't done anything, but it's tough to beat. they have a aaa balance sheet. >> everybody is looking for yield. thanks so much, guys. >> we head toward the close. about 14 minutes left here. off the lows, the dow is virtually unchanged. >> we all new something was
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wrong with google's premature earnings release when we saw a line reserved for a quote from the ceo. >> guess what? now pending larry has gone viral. it's a tweet count. plus, we'll hear from top google executives on this debacle when we bring you the company's conference call. that comes up live at 4:30 p.m. eastern time. do not go anywhere. stay tuned. smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
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want to give you an update on google. check it out. down about 8% off the stock, off of the worst levels. it had been halted on that premature earnings release. we want more on this developing google story right now. john fort just got off the phone with the company. john, what can you tell us? >> well, first of all, i just want to clarify something that's taken off. i'm not saying google gave analysts earnings guidance ahead of time. you look at this quarter, the numbers, it's an interesting position google is in with the core business showing some weakness, especially based on those cost per click decline numbers. also, motorola. there are going to be a lot of questions about that on the call with the operating loss topping
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$.5 billion. quite an interesting call we're going to have this afternoon. >> all right, john. thanks so much. >> very good. you knew this was going to happen. adding to google's surprise accidental earnings release was an unfinished line in the paperwork that read "pending larry quote." they were reserving that spot for a quote from ceo larry page. a clear sign that the release was not ready at that point. >> in addition to sparking the selloff in the stock following that halt of google's shares, the release almost instantly generated a twitter handle @pendinglarry. one of the first tweets was, somehow i'll find a way to blame today's early release on apple maps. >> it also took a swipe at android operating system when it said, this is what happens when you submit your report to sec via android. >> and, thought that groupon deal for sec document files of too good to be true. >> and these are just the ones
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we could show you on television. there were other ones. >> this is the new world, bill. whatever happens goes viral. >> there are some very, very creative people out there. we make light of this. i'm sure people at google is not making light of it. >> we've got that conference call coming up. management is going to get on the phone in about 40 minutes. we're going to take the call live for you to get their explanation of what went on. down 7.5% on the stock right now, off of the lows. it had been down 10.5% earlier in the trading session before that halt. >> all right. there were other things that happened today. we'll have a recap of the day when we come back with the closing countdown in a moment here. >> stay with us. gecko (clearing throat) thank you, mr. speaker, uh, members of congress. in celebration of over 75 years of our government employees insurance company, or geico...as most of you know it. ...i propose savings for everyone! i'm talking hundreds here... and furthermore.. newcaster: breaking news. the gecko is demanding free pudding.
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like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. a little less than five minutes left. what a trading day this was. >> all about google. >> one of our producers said to me early in the session, not much going on today. it was right after that the google release came out. so that's the last time she says that. let me show you as we head toward the close, this is what google is doing right now. here was the selloff on the earnings.
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the halt. since that, a bit of a come back here. did it impact the rest of the market? a couple indices to show you. the dow, interestingly, even though google doesn't trade there, we saw that peak just as the earnings release came out. then it traded south. you did see it definitely with the nasdaq. there's the google impact. then it traded after that. the question, michael farr, since you thoen stock already, would you buy more with this selloff? >> yes, i'd like to get more news, and i'd like more detail, but from what i've seen so far, i would buy more. it's a reason priced multiple. it's a strong swimmer in a rough sea of technology right now. rough economic sea underlying what's going on. i think there's still money to be paid here for the long term. >> warren myers, what was going on today in terms of the donnelley post? google blaming donnelley for this mess-up.
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>> you know, obviously they got beaten down off the original news. it's come back a little bit. by all accounts, it's a small subsidiary of the company. it's not surprising that there was a little selloff based on that initial news. the bigger issue to me, though, is the tech earnings and numbers we've sneeen in the last couple days. that's a bigger consequence. they've been in a strong leadership area for quite a while. if this is the beginning of a trend, that's troubling to me. >> ibm disappointed. intel disappointed. microsoft is out after the close. the estimate is 56 cents. what are your expectations there? >> certainly from everything else we've seen, you shouldn't be surprised if microsoft actually hits the number. it's off a much larger base, of course. if it hits the number, that will be really good news. when you see an ibm that's down as cnbc was reporting, 8% over the past two days, you can't be too much too surprised when you see other players in that same industry show some weakness. >> is it the broad economy and
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the fiscal cliff? is it something going on in technology? what do you think is behind these misses in tech? >> i think it's been a strong group that sees a slow economic environment now. more importantly, coming up around the bend. i think that's the biggest concern. i think it's the overall economy that's finally weighing down on a fairly strong performing group for a while. >> there's some hesitation in that business spending, in that cap ex on the part of business, still waiting for greater certainty from washington, the election, and what's going to happen from the fiscal cliff. they're sitting on their cash. >> all right. i'm going it get ready for the next hour. >> we wait for that conference call. >> microsoft is going to be out. we've got the conference call live out of google. bill, see you tomorrow. >> you bet. take care. where was the strength and weakness inside the dow today? the best performing stock inside the dow was travelers, the insurance giant, which was trading higher today all day. the worst performer was ibm. as bob pointed out, it's been down 8%. really punish the since they missed earnings the other day.
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travelers up. good day for the financials overall. not such a good day for technology once again. a couple other things to keep an eye on, the yield on the ten-year continued higher today, up to 183. two weeks ago that was at 162. it has skyrocketed in that time. rick santelli has said he thinks it could go to 2% before all is said and done. as for the sectors today, the best performers, telecom, which was punished the other day. industrials, utilities, financials, materials. michael, what do you like in this? we talked ad nauseam about technology for obvious reasons today. what else do you like? >> you have to remember 1999 when the economists said drowning in oil. it was $12 a barrel. nobody wanted it. i think you have to hit them where they ain't. johnson & johnson, 13 times earnings or so with a 3.6% dividend. i continue to like microsoft. you have to look at some of the banks selling at tangible book value. some of the consumer stocks and
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staples i like. >> very good. i'll let you get ready for the earnings release from microsoft. thank you for joining us. michael, always good stoo to se. stay tuned. microsoft coming up momentarily. don't forget about the earnings conference call from google in 30 minutes. the second hour of the "closing bell" right now with maria bartiromo. see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo coming to you from the floor of the new york stock exchange. the dow lower. the nasdaq hit hard. it's because of the story of the day. google, the technology giant today badly missing wall street expectations with its earnings, but that's just half the story. the company's results were prematurely released hours ahead of schedule. the stock closing sharply lower after being halted for much of the day on the heels of that premature release. it's been a dramatic afternoon. it's about to go up a notch. we are a half an hour away from a